Tuesday’s Tennessee Sports Wagering Advisory Council meeting was nothing if not eventful. The Council, made up of nine appointees, determined that the proposed sports betting rules need another draft, and the most controversial issue — an 85% percent cap on payouts (or a required 15% sportsbook hold) — looks to be headed to somewhere around a 90% cap.
Although reconsiderations and revisions will delay the eventual launch of legal sportsbooks in Tennessee, a variety of changes will be welcomed by stakeholders and sports bettors alike. It now appears that operations won’t go live in the Volunteer State until late summer, perhaps later, with the hope of kicking off for the 2020 college football and NFL seasons.
A challenge in Tennessee, which legalized mobile-only sports betting in the spring of 2019, has been in crafting regulations acceptable for the state and stakeholders. Unlike most other states to legalize sports wagering post-PASPA, the Volunteer State is not home to any casinos or a gaming commission to regulate them. Per the enabling legislation, the task of overseeing sports wagering belongs to the Tennessee Education Lottery Corporation (TELC), which has not yet opened the application process as it works through the regs.
Parlay ‘loss’ rule to be changed
The general feel of the meeting was that Council members and the TELC will take a small step back to reassess the proposed rules and seriously consider suggestions received via public comment earlier this year.
Susan Lanigan, chair of the TELC, has indicated that there will be a second draft of the regulations. Looks like they aren't close to being finalized.
There was a lot of feedback from the first draft.https://t.co/Sz7FqWl50R
— Brian Pempus (@brianpempus) February 18, 2020
One change the Council is making concerns a proposed rule that would make a parlay card a loss if one leg is a tie. In every other legal jurisdiction, including Nevada and New Jersey, a tie on a parlay simply makes that leg null, odds are revised and the parlay goes on. In Tennessee’s proposed rules — to the chagrin of stakeholders and potential bettors alike — the tie would essentially give the “house” a win. This issue was a key part of the discussion when the TEL released an overview of public comments last month.
Regulators appear to be listening and say they will remove the requirement in the next draft.
In addition, the current rules proposal calls for a cap of 85% on what operators can pay out to winners. Though the Council didn’t clearly decide to remove or change this requirement, there was enough discussion, including a suggestion to eliminate the cap completely, that it seems likely the rule will be revised.
TELC indicating that it views sports betting as a form of "entertainment," and as a way to benefit education.
Regulators currently throwing numbers around.
93% and 95% being considered.
— Brian Pempus (@brianpempus) February 18, 2020
“I am encouraged we are making progress,” said Council member Tom Lee, a Nashville-based attorney and lobbyist of the law firm Frost Brown Todd. “I wish we hadn’t been so delayed, but that is now past. What counts is what we do next, and I am convinced the time we take in the next sixty days to get this right will be worth it for players, licensees, and the state.”
Among other key issues discussed:
- Revising some licensing fees;
- Revising a proposed rule that would give the TELC 30 days to review marketing and advertising campaigns. Stakeholders have argued the time period is unreasonable, as the sports betting landscape changes quickly and operators need to adapt; and
- Applications were shared for Council members to review.
